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Lou Dobbs Tonight

Deals with the Illinois Governor; Obama and the Governor; State of Corruption; Bailout Bonuses; Homeowners Defaulting; More Foreign Workers?

Aired December 10, 2008 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LOU DOBBS, CNN ANCHOR: Thank you, Wolf. Tonight disgraced Illinois Governor Rod Blagojevich refuses to step down. The president-elect calls for his resignation. Just how close was Obama's relationship with the disgraced governor? We'll have complete coverage.
And tonight the bailout for Detroit is in jeopardy. A critical vote in the House could occur within the hour. But Republican opposition in the Senate is rising. We'll have the latest for you.

And tonight middle class homeowners finding that federal mortgage help isn't much and certainly isn't enough, many heading back into foreclosure after that help.

And a congressional panel says the federal bailout will do nothing for people who are losing their homes. We'll be joined by the head of that oversight panel, Professor Elizabeth Warren (ph). She's our guest tonight along with the top political analyst in the country; all of that, all the day's news and much more from an independent perspective, straight ahead.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, December 10th. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. Major new developments tonight in the Illinois governor corruption scandal, Congressman Jessie Jackson, Junior is Senate candidate five named in the U.S. attorney's affidavit in the arrest of the governor. The congressman says he's done nothing wrong and is not subject -- a subject of that investigation.

The governor tonight refuses to quit. He has gone back to work a day after his arrest on wide-ranging corruption charges. President- elect Obama is now calling for the governor to resign, and the scandal raises serious new questions about just how close the president-elect and his team were to the disgraced governor and his staff. Drew Griffin has our report.

(BEGIN VIDEOTAPE)

UNIDENTIFIED REPORTER: There he is. Governor...

UNIDENTIFIED REPORTER: Governor...

UNIDENTIFIED REPORTER: Governor... DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): Call it business unusual for the Illinois governor, now ducking media staked out at his home and racing past cameras as he was driven to his Chicago office. One day after his arrest and amid calls from every corner of the state for his resignation, the governor was silent.

Not so silent? Congressman Jessie Jackson, Junior, who suddenly found himself defending his quest to fill the U.S. Senate seat Democrat Governor Blagojevich was allegedly trying to sell.

REP. JESSIE JACKSON, JR. (D), ILLINOIS: I reject and denounce pay-to-play politics and have no involvement whatsoever in any wrongdoing. I did not initiate or authorize anyone at any time to promise anything to Governor Blagojevich on my behalf.

GRIFFIN: A law enforcement source with detailed knowledge of the investigation confirms to CNN's Kelli Arena that Democratic Congressman Jessie Jackson is the Senate candidate number five talked about in the federal complaint against the governor. That same federal source and Congressman Jackson's newly hired attorney say the congressman has done nothing wrong.

JAMES MONTGOMERY, SR., JACKSON'S ATTORNEY: The congressman and I have spoken with the U.S. attorney's representative and have been assured that the congressman is not a target of this investigation.

GRIFFIN: And while Congressman Jackson is not named, is not charged, and no one in the federal investigation is insinuating any wrongdoing on his part, what is explained in the document about that candidate number five is at least troubling. On December 4th, Blagojevich tells an adviser he was getting Senate candidate five greater consideration because he would raise money for the governor.

Blagojevich adds, he might want to get some money up front maybe from Senate candidate number five to ensure the promise is kept, prosecutors say. Then the governor allegedly recalls a conversation from October 31st with an associate of Senate candidate number five. We were approached, pay to play, that, you know, he'd raise me 500 grand an emissary came. Then the other guy would raise a million if I made him, Senate candidate number five, a senator.

JACKSON: I never sent a message or an emissary to the governor to make an offer to plead my case or propose a deal about a U.S. Senate seat period.

(END VIDEOTAPE)

GRIFFIN: Lou, Jackson did meet with Governor Blagojevich on Monday afternoon about the Senate seat. But prior to that, Jessie Jackson, Junior says he hasn't talked with this governor for the past four years. Today he called on the governor to resign, and there was a resignation at the Illinois governor's office, just not the one that everybody was hoping for here in Illinois. It was a deputy governor, Bob Greenly (ph) who resigned. No reason given by the office. Lou?

DOBBS: And Drew, do we have any indication as to what was discussed between the governor and Congressman Jackson?

GRIFFIN: According to Congressman Jackson, he went in there and laid out his case, why he was the most experienced of the congressional candidates talking about his seniority in the House and his service to Illinois these almost past 14 years now, trying to lay out the case on paper, that he was the most qualified to be appointed for this job. Today Jessie Jackson, Junior said he had no idea that while he was laying out that case that the whole entire pick was flawed and corrupt.

DOBBS: All right, Drew, thank you very much -- Drew Griffin reporting.

One senior member of the Obama team is on the record as supporting political patronage, senior advisor David Axelrod in 2005, then a Democratic political consultant wrote an op-ed article in "The Chicago Tribune." In that op-ed he said, quote, "the Democratic process is often messy. Diverse constituencies fight fiercely for their priorities. Their elected representatives use the influence they have to meet those needs, including sometimes the exchange of favors, consideration for jobs being just one."

Just two weeks ago, Axelrod said the president-elect talked to Blagojevich about that Senate seat. He later said he misspoke. The president-elect says he's had no contact with the governor. President-elect Obama today tried to distance himself from the governor, calling upon Blagojevich to resign and questioning the governor's ability to lead while facing federal charges. Jessica Yellin has our report.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Barack Obama is stepping up the pressure on Governor Blagojevich to resign through an aide telling CNN he believes under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois. That statement comes amid questions about what Barack Obama is not saying regarding the charges against the governor. Yesterday the president-elect was careful about the words he chose.

BARACK OBAMA (D-IL), PRESIDENT-ELECT OF THE UNITED STATES: So we were not -- I was not aware of what was happening.

YELLIN: Not "we," but "I" leaving open the possibility that one or more of his aides did have contact with the governor's office. And according to the complaint, Blagojevich wanted to talk to at least one of Obama's aides. The governor is quoted saying, on November 13th, that he'd like to call one of president-elect's advisors and ask him, can you guys help raise 10 or $15 million. It's not clear whether that call ever happened. The prosecutor went out of his way to make it clear Obama is not in his crosshairs.

PATRICK FITZGERALD, U.S. ATTORNEY: The complaint makes no allegations about the president-elect whatsoever.

YELLIN: But there's the perception issue. The man who promised to run the most candid White House in history is saying...

OBAMA: As this is an ongoing investigation involving the governor, I don't think it will be appropriate for me to comment on the issue at this time.

YELLIN: Sound familiar?

SCOTT MCCLELLAN, FORMER W.H. PRESS SECRETARY: But our policy has been that this is an ongoing investigation. We're not going to comment on it.

UNIDENTIFIED MALE: Not be appropriate for me to comment on ongoing investigations.

YELLIN: It begs many questions.

JOHN DICKERSON, POLITICAL CORRESPONDENT, SLATE: How did the campaign talk to Governor Blagojevich? What did Senator Obama know about his friend and her chances? Why did she abruptly, Valerie Jared (ph), take herself out of the running? There are a series of questions here that just haven't been answered.

(END VIDEOTAPE)

YELLIN: And Lou, Barack Obama will have a chance to answer those questions. Tomorrow he has called a news conference for the morning and no doubt reporters are going to be armed with those questions and more. Lou?

DOBBS: Look forward to it. Thank you very much, Jessica -- Jessica Yellin reporting from Chicago.

Well corruption in Illinois reaches far beyond the governor's office certainly. Illinois has a long history of crooked politicians at seemingly every possible level. And Illinois has a history of ignoring campaign abuses. Illinois has few laws that limit campaign contributions. And it's left with a reputation as a state wide open to corruption. Bill Schneider has our report.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Illinois has a rich history of political corruption.

ROBERT GRANT, FBI SPECIAL AGENT IN CHARGE: A lot of you were in the audience and asked me the question whether or not Illinois is the most corrupt state in the United States. And I didn't answer that question yes or no, and I can't answer that question today.

I don't have 49 other states to compare it with. But I can tell you one thing, if it isn't the most corrupt state in the United States it's certainly one hell of a competitor.

SCHNEIDER: Five Illinois governors have been criminally indicted, three were convicted and went to jail. George Ryan, Rod Blagojevich's predecessor is in jail now. Illinois has a long history of corruption probes. This one is operation board games.

FITZGERALD: It's a very sad day for Illinois government.

SCHNEIDER: "Chicago Sun-Times" reporter Lynn Sweet has been covering corruption in Illinois for years.

LYNN SWEET, CHICAGO SUN TIMES: Illinois is a wide-open state, very few laws limiting campaign contributions.

SCHNEIDER: Is the Blagojevich story really anything new? Yes, for several reasons if proven true, the stupidity. The governor knew he was under investigation. The arrogance, did he really expect a cabinet appointment and the grandiosity.

UNIDENTIFIED MALE: The most cynical behavior in all this, the most appalling is the fact that Governor Blagojevich tried to sell the appointment to the Senate vacated by President-elect Obama. The conduct would make Lincoln roll over in his grave...

SCHNEIDER: And look at how prosecutors said he was trying to do it.

UNIDENTIFIED FEMALE: The criminal complaint describes almost a marketing campaign to find the right deal, like a sports agent.

(END VIDEOTAPE)

SCHNEIDER: People suspected vote fraud in Illinois back in the 1960 presidential election. Richard Nixon had a narrow lead in Illinois until shortly after midnight when a late vote count in Cook County (ph), that includes Chicago, put John Kennedy over the top. Well Nixon conceded and there was no investigation. Lou?

DOBBS: And Bill, it's fair to point out that five -- now five, imagine this, of the last eight governors of Illinois have either been indicted or arrested. It's extraordinary.

SCHNEIDER: And three went to jail. One is in jail right now.

DOBBS: Right.

SCHNEIDER: It is amazing. And they've never -- I asked Lynn Sweet this question. She said they have never had any governor or any public official who has been really effective in putting through a program of reform.

DOBBS: A reform. By the way, that that was the campaign clearing (ph) call of one Governor Rod Blagojevich.

SCHNEIDER: Yes it was.

DOBBS: Bill Schneider, thank you very much.

SCHNEIDER: OK.

DOBBS: The charges against the governor brought out the entrepreneurial and satirical spirit in some. Just a short time after the governor's arrest yesterday, this advertisement appeared on e-Bay, Obama's Illinois Senate seat for sale. Others were quick to follow. E-Bay removed some of the ads, but about a dozen new ads popped up again today.

Up next here much more on the Blagojevich corruption scandal, four of the best political thinkers in the country join me. They'll be assessing the possible implications.

Also the meager federal help for homeowners in this country who face foreclosure, we'll have that special report. And money that should be going to families in danger of losing their homes may instead be going to executive bonuses and merger and acquisitions and you know other essential things. We'll have that story and a great deal more next.

(COMMERCIAL BREAK)

DOBBS: On Capitol Hill today key lawmakers were blasting the Treasury Department's handling of the multi-trillion dollar bailout of Wall Street. Principle criticism, the so-called rescue package lacks oversight to ensure that the bailout is working for taxpayers, not just the banks and their executives. Another charge today that so- called retention incentives at insurance giant AIG appear to be really bonuses -- imagine that -- Louise Schiavone with our report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Fresh outrage on Capitol Hill over plans by troubled insurance giant AIG to pay retention awards to 168 employees over and above their salaries ranging from $92,000 to $4 million.

REP. ELIJAH CUMMINGS (D), MARYLAND: We've allocated now $152 billion on or behalf of AIG. A lot of people losing their homes, they're losing their jobs and then they see their tax dollars being used for AIG employees.

SCHIAVONE: This despite CEO Edward Liddy's (ph) pledge to take $1 a year pay this year and a previous AIG promise to eliminate bonuses, Treasury's bailout point man didn't have enough to say about the AIG pay enhancements to satisfy this lawmaker.

REP. DONALD MANZULLO (D), ILLINOIS: You can sit there and not come to a decision as to whether or not $3 million bonus is too much? If you even have to ask that question whether it's too much, Mr. Kashkari, you're not the man for the job.

SCHIAVONE: Analysts say from executive retreats to retention awards to the paying of dividends Wall Street is still mired in business as usual, all of which flies in the face of the intent of Washington's bailout.

ROBERT MANNING, ECONOMIST: None of this money is being channeled directly to Middle America that's desperately confronting a credit crisis. PROF. PETER MORICI, UNIVERSITY OF MARYLAND: We have the compensation structure driving the business model instead of the business model determining what compensation should be.

SCHIAVONE: Morici says inflated corporate salaries set the stage for this year's financial collapse. In 2007, for example, at bankrupt Lehman Brothers CEO Richard Fuld took home roughly $72 million; Countrywide's Angelo Mozilo, 125 million; Bank of America's Kenneth Lewis, 20 million; Morgan Stanley's John Mack, 17 million.

(END VIDEOTAPE)

SCHIAVONE: Bonuses are off this year though for key executives at Goldman Sachs, Merrill Lynch, Morgan Stanley and Wachovia. Citigroup says executive package decisions, Lou, are still a few weeks away -- Lou.

DOBBS: Well during that time they might consider the fact that most of the companies you just mentioned have been acquired or are either desperate for or forced to take federal money to put on their balance sheets. I mean it's really ridiculous Fuld making that kind of money, the head of Countrywide Insurance. It goes on.

Ken Lewis, by the way, at Bank of America, $20 million, at least he's running the biggest bank in the country and doing it profitably. He's probably worth that by comparison. Thanks very much, Louise Schiavone.

More than half the mortgages renegotiated in the first quarter of this year were back in default after six months. That troubling fact is raising questions about whether the Wall Street bailout can possibly help homeowners who are in danger of foreclosure. Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Geoff Bagley (ph) and his wife bought their Maryland home in 2005 with an adjustable rate mortgage and a monthly payment of $1,300. They both worked and could afford it.

GEOFFREY BAGLEY, HOMEOWNER: Trying to live, as they say, the American dream, I mean everybody wants to come home to a house, you know and not have to worry about OK what are we going to have to cut back this month so we can have a roof over our head the next month.

PILGRIM: But according to the terms of their original loan, their interest rate climbed twice in one year, nearly doubling their monthly mortgage payment to $2,400. Life got difficult, a costly pregnancy, higher food and energy costs and now five children. Eventually they fell behind.

They applied for a loan modification and their payments fell to $2,000 a month, but now with less overtime at work, they say they still can't keep up and may fall even further behind. Defaulting on a mortgage twice or re-defaults are not uncommon. The Office of the Comptroller of the Currency or OCC says new data shows more than 60 percent of loans modified in the first quarter of 2008 fell delinquent again in eight months. They say reasons why people default twice range from modifications that didn't lower the payments enough to the bad economy or people simply overload on credit card debt to get out of the hole even if their mortgage is reduced.

DOUGLAS ROEDER, OFC. OF COMPTROLLER OF THE CURRENCY: Many times it's economic factors, lost jobs, unemployment being the key thing or reduction in work hours. Some strain on income that then puts a borrower in a tough situation.

PILGRIM: In the meantime families like the Bagleys will keep working and hoping they can afford to keep their home.

(END VIDEOTAPE)

PILGRIM: Now foreclosures are expected to continue to soar. A new study by Credit Suisse predicts more than eight million foreclosures over the next four years. That's about 16 percent of mortgages and that study anticipates a 40 percent re-default rate on new loan modifications, Lou.

DOBBS: Well if we continue to allow the lenders to do what -- who's the lender?

PILGRIM: It was a small private lender. It's a small...

DOBBS: Do they have a name? Because I really think they ought to have a name put out there.

PILGRIM: Yes.

DOBBS: The fact is, this example it goes from $1,300 -- is that what you reported...

PILGRIM: Yes, 1,300...

DOBBS: To $2,400.

PILGRIM: Twenty-four hundred...

DOBBS: So that's an 80 percent increase.

PILGRIM: It was a sub-prime.

DOBBS: An 80 percent...

PILGRIM: Yes.

DOBBS: What this is -- this is stealing, all right.

PILGRIM: Oh...

DOBBS: It's an 80 percent increase in the mortgage and they modify it and drop it by 400. By my math that's about a 15 percent decline. PILGRIM: We're hearing...

DOBBS: And over this period of time we have interest rates now at the lowest level they've been -- this is ridiculous. Why should there be a study about what's happening to people going into default after they've had a mortgage modification. This isn't a modification. This is just a license to steal and state governments need to get into it. The federal government and stop this nonsense.

PILGRIM: Yes.

DOBBS: This is ignorance.

PILGRIM: You're absolutely right and the OCC said today that these modifications are absolutely cosmetic.

DOBBS: Then why don't...

PILGRIM: They are not...

DOBBS: ... they get into it along with the office of thrift supervision, the FDIC -- how -- the FBI for crying out loud. These people are thieves. Kitty, thank you very much. Appreciate it.

Well an update now on a tragic accident that took place yesterday in California. A man lost his family when a military jet, a Marine Corps jet crashed into his home. He spoke out for the first time today. He is showing remarkable compassion for the aircraft's pilot.

The Marine Corps FA-18 slammed into the family's house in San Diego Monday and as it tried to get back to the Marine air base. The gentleman Dong Yun Yoon's wife, mother-in-law and his two small children all killed in that crash. He is an immigrant from Korea. He said he did not blame the pilot. And he called him, in fact, one of this country's treasures.

(BEGIN VIDEO CLIP)

DONG YUN YOON, FATHER OF VICTIMS: I heard the pilot is safe. We pray for him not to suffer from this accident. I know he's one of our treasures for the country.

(END VIDEO CLIP)

DOBBS: And so is he, incredible strength, great class, great strength. I can't just compliment you or thank you enough for the example you are demonstrating for all of us, and we're very proud to call you a fellow American and our hearts and our prayers go out to you.

Up next new questions about the president-elect's relationship with Governor Blagojevich, we'll be right back.

(COMMERCIAL BREAK)

DOBBS: The Bush administration is giving the agricultural industry an early Christmas present. Some lame duck. The administration has decided to change the rules in the middle of the night for so-called guest workers in agriculture. You may remember this is the president who said we needed a guest worker program who ignored throughout the fact that we have more than 11 guest worker programs already in the country.

Well, the administration found one more guest worker program and found some new rules that they thought would make it easier for businesses to bring in more cheap foreign labor and at the same time allow them to cut the wages of American farm workers. The Bush administration making the change in the dead of night hoping that no one would notice. Well guess what, Mr. President? We did. Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The labor competition for farm workers just intensified. The Department of Labor posted rule changes that eliminate the requirement that farms hire U.S. farm workers first. No longer will a farm be required to show that they have looked for available domestic farm workers to get an H-2A visa. They'll just have to file a letter saying they need foreign guest workers. The H-2A visa program for agricultural workers has no cap, meaning the number of workers that can be brought in are unlimited.

BRUCE GOLDSTEIN, FARMWORKER JUSTICE: The whole point of the H-2A program is supposed to be that if there is a shortage of labor, then the employers must demonstrate that they are actively recruiting workers to try to get them to apply for their jobs, and they must offer decent wages and working conditions to attract them to those jobs.

TUCKER: Instead the new rules would slash wages for a group of workers that the United Farm Workers say now only earn roughly $15,000 a year. The proposed changes have been known for a while. They've been pushed by large agribusiness saying farm labor is in short supply. It's an argument that has a familiar ring.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm for a temporary worker program. We got to create a lawful way for foreign workers to fill jobs that Americans are not doing.

TUCKER: But unemployment levels are at 15-year highs. And there are some 20 guest worker programs -- the B-visa, H-visa, O-visa, P- visa, Q-visa, and the R-visa. And then there are some student visas which allow the visa holder to work part time. It's not clear how many guest workers were admitted to the U.S. last year, but the State Department issued roughly two million guest worker visas in fiscal year 2008.

(END VIDEOTAPE)

TUCKER: Now, as for the rule changes to the H-2A program, there still is a chance that Congress could stop the rule change, but it's not likely. In fact not many in Congress appear aware of the pending changes which go into effect January 16th and it doesn't stop at Congress, Lou. A number of agricultural economists I called today had no idea that these rule changes had been posted.

DOBBS: Well I want to say this administration is going out with their legacy. This is one of the most dispiriting, deceitful, dishonest groups of people ever to make up an administration and they do so with the most sanctimonious of attitudes about it all. I think that they are -- they are a disgrace to this nation, each and every one of those people involved in this kind of nonsense.

This president, he wants a legacy. I'll tell you what his legacy is. It's one of disgust. It is contemptible what this man has done on almost every front. Bill Tucker, thank you very much. Appreciate it.

Well time now for some of your thoughts. Doug in Ohio, "The only thing worse than the Illinois governor's stupidity is his arrogance, thinking he could be so manipulative and dishonest. Is it any wonder Americans are so cynical about their government?"

And David in California said, "Dear Lou, can you help me understand the difference between lobbying and bribery?" It seems to me by posing the question you understand the distinction in this country very well.

And Ron in Colorado, "You can sure tell the economy is bad when you hear that illegal aliens are leaving because they can't get work or the free services they used to get. I heard they were taking the corporate jet back."

We'll have more of your thoughts here later in the broadcast. Each of you whose e-mail who is read here receives a copy of my new book "Independents Day: Awakening the American Spirit". It's now available in paperback.

And up, next the president-elect tells him to quit. The governor says no, I think we'll just go to work. We'll have much more on the Illinois corruption scandal, four of the country's top political analysts join me.

Also, the auto industry bailout, it did appear to be a sure thing. It now appears stalled. We'll have the very latest.

A Congressional panel says the bailout isn't helping people losing their homes. The head of that oversight panel is Professor Elizabeth Warren. She joins me here next. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: The $14 billion auto industry bailout in jeopardy tonight. The house is set vote on the measure soon and could pass it.

You're looking now, by the way, at a live shot of the debate on the floor of the House of Representatives. Republicans in the Senate, however, are now threatening to block that measure altogether. Republican lawmakers say the legislation doesn't contain sufficiently strong oversight of the carmakers. The bailout oversight committee itself today criticized the Treasury Department for not using some of the billions of dollars of bailout money to help everyday Americans. The head of the oversight panel joins me now, Harvard Law School Professor Elizabeth Warren.

Professor, great to have you with us.

ELIZABETH WARREN, CONGRESSIONAL OVERSIGHT PANEL: It's good to be here.

DOBBS: This is -- I have to say, as we are reporting on what is happening to people in foreclosure, a million people foreclosed upon over the past year, the fact that this money comes as sort of a $350 billion is sort of an afterthought to treasury secretary Hank Paulson that perhaps something should be done for the homeowners. I mean how do you preserve your equanimity? Let me ask it that way.

WARREN: I have to say, Lou, I don't have much equanimity right now. We've handed this money out. It's been stuffed into the vaults of the banks. We haven't asked the banks for any terms or to change anything. We haven't said how are you going to tie this to the American families Let's face it. The bottom line is you can't save banks if the American family goes down the tubes. It's not possible. They can't exist. You don't get to save them and not save this country and the people who run this country, who are the real economy in this country.

DOBBS: Absolutely. Well, your first report to Congress asked some tough questions that our viewers I think would like to see. You testified at today's house finance hearing -- you testified with these questions. What have financial institutions done with the taxpayer money so far? Is the public receiving a fair deal? Is the Treasury Department imposing reforms on financial institutions, taking that taxpayer money? Were you satisfied with what you heard from assistant title secretary Neel Kashkari?

WARREN: These are the questions. The answer is we don't have answers yet, but I'm going to keep asking these questions. Our committee is empowered by Congress, indeed obligated by Congress to get out there and answer those questions. Let me be clear. We've only been in existence for two weeks, 14 days. And so the deal here is, we didn't spend the 14 days we've had that we've been a committee, getting the fax machines set up and offices and all that sort of thing. In fact, we don't have that stuff yet. What we have is we have a report, about a 35-page report, lots of footnotes and a lot of hard questions. That's the message that's coming out of the Congressional oversight panel. We're here. We're asking questions and we're going to keep doing it.

DOBBS: Congressman Paul Kanjorski today had this to say at the hearing. Let's listen in.

(BEGIN VIDEO CLIP)

REP. PAUL KANJORSKI (D), FINANCIAL SERVICES CMTE.: We have to tell the American people the truth, and that truth is going to hurt. Some of that truth is we're going to spend billions of dollars incorrectly, wrongly and wastefully. They're going to have to know that because we're like mad scientists in an economic laboratory trying to get the correct potion.

(END VIDEO CLIP)

DOBBS: Professor, what's your reaction to that statement?

WARREN: There's just -- this breaks my heart. We don't have billions of dollars to spend here. One of the problems with spending money in this way is that at some point we really do run out of money. And if we're not using our money in the right ways, in ways to strengthen the American family, in ways to help out with this crazy mortgage foreclosure situation that we've got going, then our opportunity will be lost. It will be gone.

DOBBS: And I would like to just say, it's one of my privileges as an advocacy journalist, there is nothing here that requires -- forgive the expression -- a rocket scientist approach. More than almost 14 months ago I was calling for a trickle-up approach for homeowners in this country. At that point the math is so simple. Average price -- median price of a house $206,000. A million houses, that would be $200 billion. If we had written checks from the treasury and paid off those mortgages, we would have significantly higher housing evaluations in this country. We would still have -- take the 8.5 trillion, $8.3 trillion to apply to the other issues in this country. I mean what is going on in that Congress?

WARREN: You know, Lou, I want to make it clear about these questions. These questions, exactly as you say. These are not rocket science questions. What they are hard questions, tough questions. One of the things we did today, besides deliver our report, is we set up a new website. The website is called cop because we're the Congress oversight panel. It's cop.Senate.gov. What we want to do is we're going to post our questions and post what we get by the way of answers. And we're also going to have a place where we're going to ask people, talk about our questions, add your own questions, tell us your stories about how the economy is working because we want the American people's voices to be heard. It's their money.

DOBBS: Well, I hope that a lot of those folks in Congress and in the Senate hear your voice, Professor Elizabeth Warren. They couldn't have chosen a better person in my opinion to chair that committee. We thank you for your time here tonight.

WARREN: Thank you.

DOBBS: All the best, Professor Elizabeth Warren.

Coming up next, the ties that bind. Just how close were Illinois governor Blagojevich and the president-elect and his staff? And what role did Congressman Jesse Jackson Jr. play in the corruption scandal if any? He is candidate number five. Four of the country's best political analysts join us for their thoughts on all of that and much more. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Joining me now four of the best political analyst in the country, Republican strategist, CNN contributor, Ed Rollins, also served as White House political director under President Reagan, chaired Mike Huckabee's presidential campaign. Good to have you here. Pulitzer Prize winning columnist, Michael Goodwin, good to see you, Michael. Robert Zimmerman, Democratic National Committeeman, good to see you Robert. Jeanne Cummings, senior political correspondent Politico.com. You're not a committee woman for anybody, are you?

JEANNE CUMMINGS, POLITICO: Not that I'm aware of.

DOBBS: Jean, great to have you with us.

Let's start with the scandal. Politico.com referred to it -- you referred to it and Politico.com as the scandal in Illinois a stink bomb tossed at close range for Obama. What do you mean Jeanne?

CUMMINGS: Well, the point we were trying to make is that, while this scandal might not directly tie to Barack Obama, there's collateral damage that comes with things like this. So even though the prosecutors went out of their way to make clear that they have no -- Obama has no connection with the investigation as it is right now, there's still going to be problems. He's been rolling out his cabinet with great control. Now he's lost control of the new cycle. He's getting questions, and will get some tomorrow about the governor and about the scandal, and it's knocking him off message. If there is a big trial in Illinois where people who donated money to him, even though he returned the money, are called up to testify, all of this creates publicity and headlines that he really doesn't want.

DOBBS: Robert, what do you think?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: It's an annoyance. It's a distraction. It's a frustration. But at the end of the day, this governor who is the Tony Soprano of governors, is not going to define or, in fact, take the Obama administration off its message, and the press will certainly ask the tough questions and try. But between the U.S. attorney's comments which indicate that Obama is not -- was not in the affidavit linked in any way to this and, in fact, the governor's own statements expressing his great fury that he was getting nothing from Barack Obama --

DOBBS: A few colorful names that he called the president-elect as well.

ZIMMERMAN: With respect to the audience, the bottom line is it's an Illinois story.

DOBBS: I'm a little hurt you wouldn't also be respectful of my feelings. Michael, what do you think?

MICHAEL GOODWIN, NEW YORK DAILY NEWS: I think Obama should be forthright about what contacts there were between somebody who was speaking for him, if only it was to say to Blagojevich, no, we're not going to make a deal. And Valerie Jarrett supposedly was Senate candidate number one.

DOBBS: She withdrew.

GOODWIN: She withdrew but this happened before that. So somebody told Blagojevich Obama wasn't going to play ball. Who was that?

I think Obama does have to be a little bit more forthright about what the contacts were. David Axelrod said they had talked. There was report on Chicago TV station they actually had a meeting on November 5th. So there's lots of reason to know that there's something -- there was some conversation. It would be quite normal for there to be some conversation. Here in New York, David Paterson, talking to Hillary Clinton about her seat.

DOBBS: What did she know and when did know?

GOODWIN: New York doesn't do that.

ED ROLLINS, REPUBLICAN STRATEGIST: The stupidity of this governor, and I think he taints a new president who got elected as a candidate of change. I think it's perfectly legitimate for them to have dialogue if they had dialogue. I think he has to be very forth coming as Michael said. I think at the end of the day, I think they knew what a bad guy this governor was.

DOBBS: There was talk of an investigation around Blagojevich from almost the time he walked into office.

ROLLINS: And I have to assume -- this obviously went right to the top of the justice department. And I think they -- state house politics are small-time politics, and I think everybody knew this investigation was going on except the idiot who keeps talking and making deals. This has to be -- an old expression that sometimes a guy is not as smart -- his IQ doesn't reach room temperature. This guy doesn't reach room temperature on a cold Chicago day. About the dumbest thing I've ever seen.

ZIMMERMAN: Give idiots a bad name.

ROLLINS: Gives politicians a bad name, too.

DOBBS: Politico.com reporting on an article, in 2005 David Axelrod wrote an op ed for the "Chicago Tribune" talking about the messy nonsense that is democracy and really demoaning the possibility that there wouldn't be jobs and other things to throw around. He sounded pretty Chicago-like in that op ed, didn't he?

CUMMINGS: He did. He's from there. Actually when you talk about victories like this, we often talk about, to the winner go the spoils. Nobody expects Barack Obama to come into town and just hang on to all of the Bush political appointees who got jobs.

DOBBS: We also don't expect him to put up a page on eBay either, do we? CUMMINGS: But that's just -- I think that's the distinction we've got going on. There's a certain amount of this that goes on that's politics. I think the prosecutors when they announce the criminal complaint tried to make this clear, too. And that's that the governor took it way over the line, that these were quid pro quos and he was bargain hunting or looking for a bidding war on some of these positions. That's way over what we're used to. And it was for personal gain as well. So this is --

GOODWIN: Could I just make one more point, too? I think for tomorrow when Obama has this press conference, he's going to have another opportunity to really denounce Blagojevich which is something he hasn't done. Yesterday he said it was a sad day.

DOBBS: Sad and sobering.

GOODWIN: And today he called for him to resign because under the circumstances, where is the outrage of what was going on?

DOBBS: When you look around this country right now, I wonder where is the outrage on so many fronts.

But we're going to be back, we're going to continue with our panel. A reminder to join me on the radio, Monday through Friday for the Lou Dobbs show. Steve Forbes, president and CEO of Forbes. We'll be talking with Keith Naughton the Detroit bureau chief of Newsweek magazine about the auto bailout or no bailout. Go to loudobbsradio.com for the show in your area.

We'll be right back with our panel.

(COMMERCIAL BREAK)

DOBBS: First a quick preview of what's coming up at the top of the hour. Campbell, tell us all about it?

CAMPBELL BROWN, CNN ANCHOR: We have a lot more on the Blagojevich scandal, what it may mean for the president-elect, also about the breaking news. We'll be talking about that today, newly revealed candidate five Jesse Jackson Jr.

We also have a "NO BIAS, NO BULL" exclusive with Scott Turrow. He used to be a shuck prosecutor. He had an op-ed in "The New York Times." Also ahead, live coverage of the house vote on the auto bailout. Is the plan really in the words of one U.S. senator, as backwards. We've got that and more.

DOBBS: Louisiana senator David Vitter using the language colorfully as we all should. Thank you very much.

We're back with Ed Rollins, Michael Goodman, Robert Zimmerman and Jeanne Cummings.

Let me turn first to the bailout. It looks like we have a real problem in the Senate for the Democratic leadership. It looks like Republicans aren't going along with the bailout without conditions. CUMMINGS: Well, these things always go in fits and starts. If it isn't resolved tonight, it's on the way to being resolved. They crossed over a line when they came to an agreement. They're fighting over details right now. So many times we've seen these details written in the dead of night.

ZIMMERMAN: Jeanne, my worry is not the details, it's the kind of agreement they're going to strike.

CUMMINGS: Exactly. Those details are so important.

ZIMMERMAN: Already we say the administration now raiding the fund that's supposed to be used for fuel efficient cars to, in fact, bail out the auto industry. We're also facing, this is most troublesome, a real question about the type of oversight being put in place. The role of a car czar can be very constructive in terms of forcing economic adjustments and compromise. We have government building cars?

ROLLINS: The critical thing here, the White House in the few weeks it has remaining and the Democrats, even though they'll control the Congress, can't put deals together unless they bring the Republicans to the table. The president can't speak for either the house Republicans or Senate Republicans. Making a deal with the White House is not going to get this done. They have to bring senators from the Republican Party to get this deal.

GOODWIN: They may need that Illinois Senate seat. Maybe Blagojevich can make an appointment right away and get that 60th vote.

DOBBS: We already sent word to the governor that that isn't going to be working so well.

ROLLINS: The other word that the president-elect ought to say is he's going to keep the U.S. attorney in place and have this fully prosecuted however long it takes.

DOBBS: I think -- by the way, a good and noble gesture, I think he's almost forced to keep Patrick Fitzgerald in place. It would look like the dickens to remove him now.

Let's turn to another Senate seat. Of course, in New York and Massachusetts, a number of other places, as well as Illinois.

ROLLINS: It's not for sale.

DOBBS: Not for sale. But Caroline Kennedy, Ruth Marcus writing in "The Washington Post." I know you most have been brought to tears, talking about the little princess growing up to be senator. Have we come to a point in this country where this is about dynasty, last name, Bushes, Clintons, Kennedy's? Where does this go?

ZIMMERMAN: One of the reasons you haven't see one Democrat or for that matter one key constituency group in the Democratic Party speak up for Caroline Kennedy is because we're not at a state of dynasty. The political media out there, the pundits who told us that Clinton was going to be the Democratic nominee, have already given the seat to Caroline Kennedy. She's going to have a very hard case to make.

DOBBS: I don't know if you had the opportunity to read it.

GOODWIN: I think the only reason to give the seat to Caroline Kennedy is neither Hillary Clinton or Chuck Schumer want it. Otherwise, there's no basis for it.

DOBBS: Jeanne Cummings, what do you think?

CUMMINGS: I wonder if this isn't a gracious act. You know, Caroline Kennedy I think doesn't have to make that hard a case to take the seat. She's been very involved in some policy discussions, and that sort of thing.

ROLLINS: No, no, no, no. Absolutely not. What has she been involved in? She basically endorsed Barack Obama. She's been a good mother. She comes from a historic family. The idea she can walk in and be a U.S. senator with no experience -- there's kind of an order here. You have to learn a little about the legislative process. Sitting at the knee of Ted Kennedy is not enough.

DOBBS: If you don't think that's true, ask Jesse Jackson Jr. how it works.

I would love to continue this, folks and we will on another day. Thank you very much, all of you. Appreciate it. Coming up coming up next, hear more of your thoughts on the billion dollar bailout for the car makers that may be voted on by our Congress. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Take to take a quick look at your thoughts.

Gary in Washington said: "Lou I firmly believe in the idea that if a company is too big to be allowed to fail than it is too big to exist." Now that is an axiom for the business schools around the country.

Suzanne in Pennsylvania: "Lou, I think it is disgraceful that the government won't give the auto makers a loan. They wasted no time giving Wall Street billions of dollars with no oversight. The auto industry has millions of main street workers who will lose their jobs," and I couldn't agree with you more.

Doug in Indiana: "Thank you, Mr. Dobbs, you're a true American who tells the truth just like it is, not sugarcoated. Once again, I thank you." And I thank you.

Joy in Louisiana: "After watching your show daily, I've come to the conclusion I may need to practice ostrich economics. I'm going to bury my hand in the sand and hope all this blows over." That's the American spirit. We love hearing from you. Send us your thoughts to loudobbs.com. Join us here tomorrow. For all of us, thank you for watching and good night for New York.

"CAMPBELL BROWN: NO BIAS, NO BULL" starts right now.